Newegg goes another round against patent trolls

Online retailer Newegg is no stranger to patent troll lawsuits. In 2013, the company decided to fight back against TQP Development, a non-practicing entity that held patents related to Internet security encryption. The tactic did not work out so well for Newegg, which lost its battle against TQP and ended up shelling out $2.3 million. But that did not mean that Newegg was ready to give up on its war against trolls.

This time, Newegg – and a group of other companies who joined them in the fight – came out on top. The troll in question is Macrosolve, which lays claim to patents that cover questionnaires presented on mobile apps. Along with other companies, such as Geico Insurance, Newegg accused Macrosolve of extorting over four million dollars from more than 60 defendants.

Macrosolve has used a classic troll strategy of sending demand letters asking for between $50,000 and $100,000 from business accused of infringing on its patent. Newegg’s chief legal officer, Lee Cheng, told Ars Technica that the secret to defeating Macrosolve was to fight back.

"People just had to start saying no," Cheng told Ars Technica. "It was very frustrating that people kept writing checks for $50,000. Every single person keeled over before they hit us and Geico."

As a result of the aggressive action by Newegg and company, Macrosolve was forced to dismiss all pending cases, admitting it could not proceed with scheduled trials. Furthermore, Newegg filed a motion seeking reimbursement for court costs from Macrosolve.

For its part, Macrosolve has contended that is has the right to enforce its patents, stating that Newegg is premature in its celebration of victory. "We've dismissed all the outstanding suits," Macrosolve CEO Jim MCGill stated. "But that doesn't mean we won't come back later. It would be acting in bad faith to go to trial in June when we've had a rejection from the patent office."